FirstCity Financial Corporation (NASDAQ:FCFC) Investor Files Lawsuit In Effort To Block Acquisition By Värde Partners, Inc.

If you purchased shares of FirstCity Financial Corporation (NASDAQ:FCFC) prior to December 21, 2012, and currently hold any of those NASDAQ:FCFC shares, you have certain options and you should contact the Shareholders Foundation, Inc.

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Company Name(s): 
FirstCity Financial
Case Name: 
FirstCity Financial Deal Case 02/04/2013
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: FCFC
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
02/04/2013
Summary: 

Feb. 05, 2013 (Shareholders Foundation) -- An investor in shares of FirstCity Financial Corporation (NASDAQ:FCFC) filed a lawsuit to halt the proposed takeover of FirstCity Financial Corporation by Värde Partners, Inc. at $10.00 per NASDAQ:FCFC share.

The plaintiff says that the defendants breached their fiduciary duties owed to NASDAQ:FCFC investors by agreeing to sell the company too cheaply via an unfair process.

On December 21, 2012, FirstCity Financial Corporation (NASDAQ: FCFC) and Värde Partners, Inc. announced that they have entered into a merger agreement under which certain funds managed by Värde Partners will acquire FirstCity Financial Corporation. Under the terms of the merger agreement, FirstCity Financial Corporation stockholders will receive $10.00 per share in cash for each share of FirstCity stock they own. The transaction is valued at $224.9 million, including debt.

However, the plaintiff claims that the $10-offer is too low and undervalues the company. Indeed, FirstCity’s financial performance improved lately. For instance, First City Financial Corporation reported that its annual Revenue rose from $45.20 million for 2008 to $74.32 million in 2011 and its Net Loss of $46.67 million in 2008 turned into a Net Income of $24.22 million in 2011. Furthermore, shares of FirstCity Financial Corporation (NASDAQ:FCFC) traded as recently as April 2012 as high as $10.00 per share.